Why Galaxy Digital Believes Bitcoin Has Begun a Major Market Reversal

2026-10-28 economy

New York, Wednesday, 28 October 2026.
Galaxy Digital declared Bitcoin’s bear market over, citing eased seller pressure and technical stabilization after weathering its shallowest recorded downturn of 53 percent.

Galaxy Digital’s Verdict: A Structural Reversal in Bitcoin’s Cycle

On October 27, 2026, New York-based Galaxy Digital—founded in 2018 by Mike Novogratz and listed on Nasdaq under the ticker GLXY—formally declared that Bitcoin’s bear market had ended in June 2026, transitioning the asset into an accumulation phase [2][4]. Alex Thorn, head of firmwide research at Galaxy, summarized the firm’s analysis bluntly: ‘We think the bear market ended in June and that bitcoin is in the accumulation phase that has preceded every prior advance’ [2][4][5]. This conclusion was not based on speculation but on a confluence of technical, on-chain, and macroeconomic signals that Galaxy argues collectively point to a structural market reversal rather than a temporary bounce.

Technical Foundations of the Bullish Thesis

Galaxy’s bullish outlook hinges on three technical pillars: the breach and sustained hold above Bitcoin’s 50-week moving average, the preservation of the 200-week moving average as key support, and the alignment with historical halving cycle dynamics [1][2][4]. Bitcoin closed above its 50-week moving average for five consecutive weeks by October 18, 2026, ending a 44-week period below this critical threshold—a streak that had begun in November 2025 [1][2][4][7]. This technical recovery occurred while the 200-week moving average, currently near $72,990, remained intact, with the deepest weekly close in 2026 coming only 4.7% below this long-term support level [1][2]. Additionally, October 22, 2026, marked day 916 of the current halving cycle, a timing window that Galaxy notes has historically aligned with market troughs on days 777, 889, and 912 [1][2][4].

On-Chain Evidence: Shrinking Long-Term Selling Pressure

Galaxy’s analysis also highlights a marked reduction in long-term selling pressure, a key indicator of structural market health. Monthly transfers from wallets with coins dormant for five or more years fell to approximately 34,000 BTC in 2026 from an average of 67,000 BTC in 2024, suggesting diminished distribution from long-term holders [1][3][6]. This decline in old-coin movement is particularly notable when compared to the 47,000 BTC monthly average observed in 2025, indicating a progressive stabilization in holder behavior [1][3]. Furthermore, the current 53% drawdown from Bitcoin’s all-time high is the shallowest in its history and the first instance where prices did not fall below the network’s realized cost basis, a metric often viewed as a psychological floor for holders [1][2][4].

Macroeconomic Tailwinds: Debasement and Institutional Realignment

Galaxy’s research places Bitcoin’s recovery within a broader macroeconomic context, emphasizing the role of currency debasement risks and shifting institutional positioning. As of October 20, 2026, U.S. federal debt reached $40.44 trillion, with a fiscal 2026 deficit of $1.99 trillion (6.2% of GDP) and annual interest payments totaling $1.28 trillion [1][2][4]. The 10-year Treasury yield stood at 5.31% on October 5, 2026, reflecting elevated long-term borrowing costs amid persistent fiscal imbalances [1][2][4]. Galaxy argues that these conditions strengthen Bitcoin’s appeal as a hedge against debasement, particularly as traditional fixed-income assets offer diminishing real returns [2][4]. This narrative is further supported by the firm’s observation that major institutional holders, including Millennium Management, Brevan Howard, and Goldman Sachs, significantly reduced their spot Bitcoin ETF exposures between September 2025 and June 2026, suggesting a liquidation phase that may now be concluding [1][2][4].

Institutional Sentiment: Thin Conviction, But Reduced Selling Pressure

Despite Galaxy’s bullish thesis, the firm acknowledges that institutional conviction remains thin, which presents both risks and opportunities. Asset managers’ net long exposure in CME Bitcoin futures has fallen 57% from its all-time high, and spot Bitcoin ETFs experienced $253.5 million in net outflows between September 28 and October 26, 2026, reducing total net assets from $110.8 billion to $102.8 billion [2][5][8]. Thorn emphasized this dichotomy in his research, noting: ‘The fast money has left, the base stayed, and everything else is priced for perfection’ [2][5][8]. While reduced institutional buying power could limit near-term rallies, Galaxy argues that the absence of aggressive short positions and the stabilization of long-term holder behavior create a more sustainable foundation for accumulation [1][2][4].

Risks to Galaxy’s Outlook: Key Tripwires and External Threats

Galaxy has explicitly outlined tripwires that could invalidate its bullish thesis. A weekly close below the 50-week moving average—currently around $76,540—and a failure to reclaim it within a month would challenge the firm’s technical outlook [1][2][4][5]. Additionally, Galaxy warns of broader market risks, including potential AI-related disruption to traditional financial infrastructure and the looming threat of quantum computing advancements, which could undermine Bitcoin’s cryptographic foundations [2][4]. The firm also highlights geopolitical and regulatory uncertainties, such as the failure of the U.S. Senate’s CLARITY Act in September 2025, which underscores the ongoing challenges in establishing a clear regulatory framework for digital assets [1][2][4].

Galaxy Digital’s Financial Position: A Vote of Confidence in Bitcoin

Galaxy Digital’s own financial performance in Q3 2026 reflects growing confidence in the digital asset ecosystem, even as broader market volumes remain suppressed. The firm reported a net income of $323 million for the quarter ended September 30, 2026, a reversal from a $85 million loss in the prior quarter, alongside a 12% increase in crypto trading volumes and a 27% rise in its average loan book to $1.8 billion [6][8]. Additionally, Galaxy’s Board authorized a new $200 million share repurchase program on October 26, 2026, signaling management’s belief in the company’s long-term prospects within the digital asset and AI infrastructure sectors [6][8]. Mike Novogratz, Galaxy’s CEO, stated during the Q3 earnings call: ‘Galaxy delivered a strong third quarter, reflecting the strength of our established Digital Assets franchise, significant appreciation across our investments portfolio, and the growing contribution from our Data Centers business’ [6][8].

Sources

Cryptocurrency market Galaxy Digital